Tag Archives | Polyethylene

Investors worry US ethylene expansions mimic mining downturn

I spent most of last week in New York and Boston, meeting with major investors.  One key topic on all their agendas was the major downturn underway in the global mining industry.  The connection with my visit was that some have already begun to worry that the planned US ethylene expansions may lead to a […]

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China’s PE imports tumble as market slows, local output rises

The above chart is a major wake-up call for anyone who still believes that China will continue to import ever-increasing volumes of major commodities such as polyethylene (PE).  It suggests demand and import growth are now at much lower levels than in the past, and may even have begun to peak. The chart shows cumulative volumes in […]

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Deflation gains: China’s plastics market sees over-capacity

More and more commentators are beginning to recognise that deflation is becoming inevitable in many major economies: China’s producer prices fell -4.3% last month, and its consumer prices rose just 0.8% Eurozone consumer prices fell in December to -0.2%, and are likely to have fallen further in January US prices rose just 0.8% in December and are […]

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China’s slowdown hits PE imports from N America and NE Asia

A manufacturing slowdown is now well underway in China, as the latest official and unofficial Indices confirm. The government is mitigating this via its policy of self-sufficiency – which means a steady reduction in the need for imports – as well as by increasing exports of higher value-added products such as polyethylene (PE).  PE is the largest volume plastic, used in […]

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US shale gas bubble will end in tears for ethylene expansions

A return to lower oil prices is good news for the global economy.  But it is bad news for all those who have invested in expanding ethylene production on the assumption that US gas prices would maintain the temporary advantage of recent years.  As the chart shows: Oil (blue line) has around 6x the energy […]

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China sees $13.5bn of fake September ‘collateral trade’ invoices

China’s ‘collateral trade’ is still a major force in world markets for iron ore, copper and even plastics such as polyethylene.  September’s data suggests $13.5bn of fake invoices added 56% to the value of China’s exports to Hong Kong, as property developers strove to raise cash to finish their buildings. Full details of the trade […]

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Turkish plastics markets see imports fall for first time since 2008

Turkey is the blog’s “go-to” market when it wants to confirm trends in global markets.  The reason is that Turkey has a very successful downstream industry, but has failed to invest in upstream capacity.  This means it is essentially an opportunistic market from a sellers’ viewpoint. During good times, exporters will only divert product from […]

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Polymer markets at risk if China’s ‘collateral trade’ unwinds

Global metal markets are at growing risk from developments in China’s ‘collateral trade’, as yesterday’s post highlighted.  Worryingly, so are products such as polyethylene and ethylene glycol, as it seems likely these have also been used as collateral more recently.  This will be bad news for producers already suffering from slowing demand: China’s economy continues to weaken as the […]

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China’s $10bn trade deal fraud hits iron ore and copper markets

Iron ore prices on China’s futures market were at 5-year lows yesterday.  Copper prices also weakened in Australia.  This adds to the blog’s concern that China’s ‘collateral trade’ market is getting closer and closer to its ‘moment of truth’. This will come as an awful shock to most outside observers, who have been led to believe China’s vast imports […]

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US ethylene outages boost European and Asian PE producers

Polymer traders must be already counting their end-of-year bonuses, as the value of the US$ rises whilst crude oil prices weaken.  The biggest bonuses will likely go to polyethylene (PE) traders competing with US producers. The reason is that US ethylene spot prices are currently at record levels.  An astonishing 10% of US ethylene capacity has been out […]

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